How to use the seasonal index calculator
- Enter the number of periods in one cycle, such as 4 for quarters or 12 for months.
- Paste or type your values in time order, with the same number of values in every cycle.
- Optionally name the periods, separated by commas, so the table reads Q1, Q2 and so on.
- Read the index for each period and the highest and lowest. An index above 1 means that period runs above the overall average.
Formula
overall average = sum of all values / number of values
period average = average of that period across every cycle
seasonal index = period average / overall average
The indexes of all periods in a cycle add up to the number of periods, because they are ratios around the overall average. This is the simple average method, and it does not remove a long-term trend first.
Three years of quarterly values
With the values 120, 90, 80 and 110 in year one, 132, 99, 88 and 121 in year two, and 126, 96, 84 and 114 in year three, the overall average is 105. The quarter averages are 126, 95, 84 and 115, so the indexes are 1.200, 0.905, 0.800 and 1.095, and they add up to 4.
A one-cycle case is simpler: values of 100, 120 and 80 average 100, so the indexes are 1.00, 1.20 and 0.80. Reading the first example, Q1 normally runs 20 percent above average and Q3 runs 20 percent below.
Using the indexes
A seasonal index tells you how a period compares with a normal period. You can divide an actual value by its index to remove the seasonal effect, or multiply a forecast of the average period by the index to estimate a specific period. The more cycles of data you have, the more reliable the indexes become.
Because the method averages across cycles, a strong upward or downward trend will blur the result, since later cycles are higher or lower for reasons that are not seasonal. In that case, remove the trend first or compare against a moving average.
Related tools
Smooth the same data with the Moving Average Calculator, project later months with the Sales Forecast Calculator, or summarize the values with the Descriptive Statistics Calculator.
Assumptions and limits
- The count of values must be a whole number of cycles.
- The method is the simple average of each period against the overall average.
- Trend, special events and missing periods are not modeled.
- Values cannot be negative, and they must add up to more than zero.
Frequently asked questions
How do I calculate a seasonal index?
Average each period across all cycles, find the average of every value, and divide the first by the second. A period that averages 126 when the overall average is 105 has an index of 1.2.
What does a seasonal index of 1.2 mean?
That period usually runs 20 percent above the overall average for the data you entered. An index of 0.8 means 20 percent below.
How many years of data do I need?
At least one full cycle is needed to compute an index, but two or three cycles give a steadier picture because one unusual year counts for less.
Why do the indexes add up to the number of periods?
Each index is a ratio around the overall average, so the above-average periods balance the below-average ones. Twelve monthly indexes add up to 12.